‘Realistic first step’

Ethanol infrastructure to fuel FFVs needed for success of Obama’s plan
By Holly Jessen | April 15, 2011

Early April brought positive news from the White House. President Obama announced a goal to cut petroleum imports by one third by 2025. To get there, Obama said the U.S. would increase responsible domestic oil and gas development, improve fuel efficiency and invest in cleaner fuels including ethanol.

Matt Horton, CEO of Propel Fuels Inc., was pleased with Obama’s announcement. It’s easy to promise big numbers, he tells EPM, but results mean more. “I think that it’s a realistic first step,” he says.

Private and government fleets are leading the way by switching to alternative fuels or electric power. In recent years the federal government has doubled the number of clean energy vehicles in its fleet and Obama said it would switch its entire fleet in the next few years. The National Clean Fleets Partnership’s five charter members, including AT&T, FedEx, PepsiCo, UPS and Verizon, plan to deploy more than 200,000 advanced technology vehicles and displace more than 7 million gallons of petroleum annually.

Although flex-fuel vehicles  (FFVs) burning E85 aren’t the only clean fuels technology mentioned by the president, it is on the list. Horton, like others, strongly believes that ethanol is the most realistic industry to reduce petroleum use now and in the future. That’s true for public and private fleets too. “When you look at the options available to federal agencies, by far the most cost-effective choice, on the vehicle side, is a flex-fuel vehicle,” he says.

The catch-22 is that while FFVs are available, the fuel isn’t available in enough areas. In 2009, E85 was only available at 1 percent of fueling stations in the U.S., according to a Government Accountability Office report.

The bottom line is that more ethanol fueling infrastructure needs to be installed. If all FFVs used E85, the ethanol industry could sell an additional 5 billion gallons of ethanol—making a significant dent in the petroleum imports needed, Horton says.

There is a federal tax credit program that covers 30 percent of the cost to install pumps at retail stations but it doesn’t go far enough and expires at the end of the year, Horton says. Propel proposes that the tax credit be extended long term and cover 50 percent or up to $100,000 per station, providing needed incentive for build out. “The key to both fleet usage of the fuels and meeting President Obama’s goals is infrastructure,” he says. “We’ve got the vehicles today for high blend ethanol, we just need more incentive to build out the infrastructure and we’ll be there.” 

—Holly Jessen